191 | Tracking Toward Wealth

Many lawyers don’t make the progress they want to make with their finances simply because they don’t pay attention to their finances.

You can’t not look at your numbers and expect them to magically get better. What gets measured gets improved.

In this episode, let’s talk about the importance of tracking your finances on your journey to wealth.

• • going through life on autopilot
  • what happens when you don’t pay attention to your finances
  • an example of how not tracking your finances leads to undesired results
  • the importance of tracking your finances to build wealth

You’re listening to Wealthyesque. We are a community of lawyers who believe that true wealth is having control of our time. I’m Rho Thomas, and as a busy wife, mom, and former Biglaw associate, I know all too well the tension between the culture of the legal profession and pretty much everything else you want to do in life. That’s why each week, I’m bringing you the information and tools you need to improve your money mindset and manage your money to create true wealth. Because ultimately, it’s not about the money. It’s about the freedom and flexibility the money affords.

Hey friend. Welcome back to the show. I hope you’re doing well and having an amazing day so far. Today we are talking about the importance of tracking your finances and measuring your progress so often we just go through life go through the day to day on autopilot, especially when it comes to our finances. So we don’t pay attention at all to what’s happening with our money. We don’t pay attention to the total amount that we bring in during the month. We don’t pay attention to how much we actually are spending and where we don’t create goals for our finances. And we’re not tracking how much we’re saving how much debt we’re paying off how much we’re giving any of that kind of stuff. And basically, it leads to being stuck staying in the same place over and over month after month, and never making the kind of progress that we want to make with our finances. When you’re not paying attention to what’s happening with your finances. There is no way that you can improve your finances. It’s like that saying when you aim at nothing, you hit it every time. That’s what’s happening. For most people, there is no goal for what they’re gonna do with their money. There’s no plan for how they’re gonna spend their money. They are not tracking where the money is going or planning how much they’re gonna save or invest or how much debt they’re going to pay off or anything like that. There’s no plan there’s no goal. There’s no intention and therefore there is no progress. What gets measured gets improved, which means if you want to improve your finances, you need to pay attention to your finances. That means setting goals, creating plans to achieve those goals, tracking what’s actually happening with your money so you can make tweaks if necessary. Let’s say for example, you create your spending plan for the month and you gave yourself X amount like $1,000 that you’re gonna spend on restaurants and takeout. How are you going? To stay on track with that if you don’t pay attention to how much you’re actually spending on restaurants and takeout? I chose this example because it happens all the time where people make a budget, they say that they’re going to spend a certain amount and then they never look at the budget again, and they inevitably end up spending more than they had planned. No, you want to track what’s actually happening. So look at your finances so you know what’s going on. And that way you can make tweaks if you’re off track from where you want to be before you get to the end of the month and you’ve overspent same with any other goal paying off debt saving investing. If you have a goal that you want to hit within a certain time period, you can measure where you are, you can track where you are against that goal and you can make necessary changes if you need to. Otherwise you’re just kind of floating along aimlessly and not making progress and not moving forward. You have got to pay attention to your numbers. And I know for a lot of people that feels really scary, like people are afraid to look at how much they’re spending or how much debt they have or whatever else but not looking at it doesn’t change it. You still have the same things happening. You’re just putting your head in the sand and not putting yourself in a position to fix it. Once you become aware of where you are once you know what that baseline is that starting point, then you have a point from which to measure and you can see if you’re moving forward or not. And if you’re not, then you can make changes to get on track. If you never create that plan if you never decide what you’re going to do. And if you never look at where you’re starting from and you’re not looking at what’s happening and paying attention to what’s actually happening then you have no idea whether you’re making progress or not. And for most people you’re not. It’s like we talked about in one of the recent episodes where I was telling you about how my husband and I weren’t paying attention to our finances, we were just going along and the extent of our strategy was seeing if we had enough money in the account to do whatever it was we’re thinking about doing. There was no plan there was no tracking, no measurement whatsoever and that’s why we weren’t making progress on our finances. We didn’t have any kind of insight into what was happening financially because we weren’t tracking it. In order to build wealth, you need to know where your money’s going. That reminds me of another thing. Another thing we track is our net worth every single month we’re looking at how much do we have in assets? How much do we have in debt? And are these numbers moving the way that they need to? That’s why our net worth has grown over time, we’re making sure that the actions we’re taking in the aggregate lead to an increase in our net worth. But if you’re not looking at your numbers, then you can’t know whether your actions are leading to increasing your net worth or not. What gets measured gets improved. So look at your numbers, track your numbers so you can make sure that you are making the right moves to keep you moving toward the wealth you want to create. Alright, that is it. For this week’s episode. Take a second and think of a friend or two who found this episode helpful and share it with them. telling others about the show helps it to grow, which helps us get this information in the hands of more lawyers. And as always, I appreciate your support. As we close out friend, I pray that you take the information you learn here, apply it in your life and open up to the realization that wealth is available to you as you do that consistently week after week. You’ll continue to take steps to regain control of your time, build wealth and live a life of freedom and choice you deserve talk to you later.